Fitch Upgrades Avis Budget Group's Ratings
The credit rating agency cites Avis Budget Group's dual-brand strategy as one reason for the upgrade.
Fitch Ratings announced it has upgraded the long-term financial risk rating for Avis Budget Group (ABG), as well as for subsidiary Avis Budget Car Rental, from B+ to BB-.
In explaining the upgrade, Fitch cited Avis Budget Group’s strength in its dual-brand strategy, leading position in the on-airport rental market, and record operating results in 2012.
Fitch also revised the rating outlook from “positive” to “stable.”
The revised ratings followed a review of the company’s auto rental and fleet leasing businesses.
“Fitch believes ABG currently has a more flexible business model than before the last downturn due to its improvements in revenue and supplier diversity, operating leverage, liquidity and funding,” Fitch Ratings said in a press release.
Fitch said that Avis Budget Group remains susceptible to pricing pressures and passenger volumes in air travel, but is now better equipped to manage cyclical downturns and maintain positive earnings – as long as there are no extreme, costly disruptions in vehicle prices and suppliers.
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